After officially banning transactions from eight Chinese software applications on Tuesday, the US authorities are now debating whether to ban investments in Alibaba and Tencent, as per the sources of Bloomberg.
Ant's Alipay and Tencent's WeChat Pay were banned from their operations by the US, citing concerns that Beijing will have access to the data collected by the platform.
Meanwhile, companies like Alibaba and Tencent splashed out billions of dollars after the Chinese regulators had started to crack down on their manoeuvres last year. This led to overseas acquisitions of major companies which could’ve challenged its Western rivals.
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"I stand with President Trump's commitment to protecting the privacy and security of Americans from threats posed by the Chinese Communist Party," Commerce Secretary Wilbur Ross said in a statement on the order.
The U.S. has also cited concerns about Chinese government influence over the private industry to justify its efforts to force ByteDance Ltd. to sell the American share of its TikTok social network and the global campaign to convince allies to swear off equipment made by Huawei Technologies Co. Supporters of such actions often cite Chinese policies such as a 2017 law that requires companies to "support, assist and cooperate" with intelligence agencies.
Earlier in 2017, Ant Group had submitted an application to the US securities regulators saying that it is "a private sector company and while a handful of Chinese state-owned or -affiliated funds own non-controlling minority stakes, they do not participate in company management,” asserting that it is independent of the Chinese government.
However, that has not aged that well as it turned out to be an oasis in the eyes of the private firm owners in China. The communist party of China has its methods of long reach into private firms, even the foreign ones operating in China. One way it does that is through the presence of party committees in companies, among them tech enterprises, that are made up of employees.
"There is a lot of power in the Chinese government's economic and financial management infrastructure, and if Ant was going to erode that power, important people would see it as a step too far," said Graham Webster, editor of the DigiChina project at the Stanford Cyber Policy Center.
The party's also stepped in on several occasions to punish executives for mismanagement, including Anbang Insurance Group's Wu Xiaohui.
